Student Loan Limits Not Keeping Up with Tuition Rates

As tuition rates at many colleges continues to rise, the limits that students may borrow each year has stayed the same.

Dependent undergraduates may borrow up to $2,625 their freshman year, $3,500 their sophomore year and $5,500 for each remaining year in Stafford Loans.

Students classified as independent from parents, may qualify for additional unsubsidized loans. Dependent students may also receive unsubsidized loans if parents do not qualify for a PLUS loan.

Unsubsidized loans can be a double edged sword -- they allow the student to pay for college, but borrowers do not receive the interest free benefit of subsidized loans.

There is also cumulative limit of $23,000 for an undergraduate education.

The limits on amounts students can borrow though federal loans hasn't increased since 1992. In that time tuition rates have more than doubled.

According to finaid.org, tuition rates increase at about twice the general inflation rate. On average, tuition tends to increase about 8% per year. In addition, general inflation has caused prices for student housing, meals and other necessary expenses to increase.

For the school year 2005-2006 many colleges dramatically raised tuition rates. An example of such tuition hikes is the University of Colorado where rates rates have been raised for all of the system's campuses. Tuition at CU-Boulder will go up by 27.8 percent, from $3,480 to $4,446. Other CU campuses will see a similar increase.

The national average tuition for public universities is $4,694 per year for in state residents. For freshmen and sophomore students, the current student loan limit does not even cover tuition costs.

Because of the restrictions with federal student loan limits, students and parents will need to become more diligent in seeking out alternative sources of college funding.

There are many scholarships available nationwide that students can apply for. One of the easiest ways to apply is through the FastWeb online database. There are also many books available that list scholarships that students can apply for.

Part time and summer student employment also becomes more important when education costs rise.

Until the federal government reconsiders raising the student loan limits, students will become increasingly dependent upon scholarships, savings and employment. The lesson for families with children not yet in college is simple -- start saving early.

Michael Carter is a contributor at College Financial Aid Guide, an informational resource for educational funding, scholarships and student loans.

---

UK Student Loans Explained

Student loans seem to be the only feasible way out... Read More

How to Find a Cheap Debt Consolidation Loan

If you're shopping around for a cheap debt consolidation loan,... Read More

Hidden Bank Loan Charges That Would Make a Pick-Pocket Envious

There can be more to a bank business loan than... Read More

Where to Look for a Fast Homeowner Loan

If you're looking for a fast homeowner loan, you might... Read More

PayDay & Cash Advance Loans Online ? How Do Online Payday Loans Work?

How online payday loans or cash advance loans work? Online... Read More

Making Your Business Happen with a Commercial Lender

If your home business is starting to overflow from the... Read More

Compare Payday Loan or Cash Advance Lenders Online Before You Borrow

Comparing payday loan lenders, also called cash advance lenders, online... Read More

Title Loans - Get More of the Title to Your Vehicle

Title loans have the same features as a secured loan,... Read More

Car Loans - Shop Around, Compare Offers, and Watch The Small Print

Getting a loan to buy your new car is, you... Read More

A Guide to Looking for Cheap Online Loans

Cheap online loans may seem hard to come by, but... Read More

Instant Cash Advance Loans - Take Advantage of The Convenience of The Payday Loans Available Online

Cash advance loans not only provide you with instant cash,... Read More

A Payday Loan Or Cash Advance Can Be A Life Saver

A payday loan or cash advance can be a life... Read More

SBA Loan: Options, Benefits, and Lenders Part 2 of 2

In this second installment, we will further examine what kinds... Read More

Cash Advance Payday Loans: Yes The Rates Are Higher!

Typically Cash Advance Payday Loans have no credit checks, and... Read More

Free Money Saving Auto and Home Loan Tips

Free Auto Loan TipsThe following tips should help increase your... Read More

A Renter in Debt? Take Out a Bad Credit Personal Loan

On average, homeowner households earn 95% more than renting households... Read More

What is a Bad Credit Loan?

A Bad Credit loan is a personal loan for people... Read More

Secrets & Benefits of Secured Loans

Borrowing money has become more and more popular in the... Read More

All About Bad Credit Secured Loans

Bad credit secured loans are a relatively recent addition to... Read More

Instant Car Loan - Get an Approval Online Quick

Your car loan is now less than an hour away... Read More

The Wonders of Compound Interest

Albert Einstein called compound interest "the greatest invention of all... Read More

Military Payday Loans

What is a payday loan? This is a small short-term... Read More

A Beginners Look at Secured Homeowner Loans

Secured homeowner loans come in a variety of different types... Read More

Refinance Car Loans - Refinancing Your Car Loan Online is Convenient

Refinancing your car loan online is now more convenient. Your... Read More

The Best Way to a Farm Loan Success

The most important and difficult part in farm mortgage shopping... Read More

Quick Cash Advance Payday Loan - Get it Free or Cheap

If you are looking at getting a payday loan or... Read More

What Type of Loan Do You Need?

There are many types of loans available to consumers. There... Read More

Should You Ever Take a Payday Loan?

Payday loans have many names -- cash advances, signature loans... Read More

What is a Bridging Loan?

A bridging loan as the name implies is a loan... Read More

Thinking Of Co-Signing For A Loan? Read This First

It is quite common for someone, who is having trouble... Read More

Cheap Loans Till Payday - Using Cash Advance Loans in an Emergency

Need extra cash till payday? It's easy to apply and... Read More

So Many Loans, So Little Time

If you find yourself in need of poor credit loans,... Read More

Become A Smarter Borrower

With a nation that has in the region of a... Read More